WASHINGTON – The United States merchandise-trade deficit unexpectedly narrowed to the lowest in more than a year as imports plummeted, signaling the impact of tariffs on shipments.
The gap decreased to $66.5 billion in October from $70.5 billion the prior month, Census Bureau data showed Tuesday. That compared with forecasts of a widening to $71 billion. Exports of goods eased to $135.3 billion, down $0.9 billion from September. Imports dropped to a two-year low of $201.8 billion.
Key insights
- The latest figures offer a glimpse of how trade may impact gross domestic product in the fourth quarter.
- U.S. trade with China has suffered as President Donald Trump ratcheted up tariffs on imports from the Asian nation, which retaliated with its own levies on U.S. goods since 2018.
- The report comes as the world’s two biggest economies edge closer to a partial deal to avert steeper tariffs that the U.S. has threatened on Chinese goods.
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- The report also showed wholesale inventories advanced 0.2% in the month as retail inventories rose 0.3%. Analysts look to these numbers to adjust estimates for economic growth during the quarter.
- Exports and imports of goods account for about three-fourths of America’s total trade; the U.S. typically runs a deficit in merchandise and a surplus in services.
- Tuesday’s figures cover goods only. The Commerce Department will release full October data for international trade Dec. 5, including services and more details on merchandise shipments.
Jeff Kearns and Katia Dmitrieva is a reporter for Bloomberg News.
